Question

The balance in the bonds payable account is a credit of $74,000. the balance in the discount on bonds payable account is a debit of $2,450. the bond's carrying amount is $71,550. group of answer choices

O true
O false

Answer 1

The balance in the bonds payable account is a credit of $74,000, the balance in the discount on bonds payable account is a debit of $2,450, and the bond's carrying amount is $71,550, making the statement false.

Step-by-step explanation:

The balance in the bonds payable account is a credit of $74,000, and the balance in the discount on bonds payable account is a debit of $2,450. The bond's carrying amount is $71,550. Based on this information, the statement is false.

To determine if the bonds payable account has a debit or credit balance, we need to understand how the account is affected by transactions. When bonds are issued, the company receives cash, which increases the bonds payable account and is recorded as a credit.

The discount on bonds payable account, on the other hand, represents the difference between the face value of the bonds and their carrying amount. Since the discount account has a debit balance, it means that the carrying amount of the bonds is higher than their face value.